Public works committee debating plan to privatize garbage collection in Scarborough

A proposal to privatize garbage collection in Scarborough is on the agenda today as the public works and infrastructure committee meets at city hall. Staff are recommending that the city hold a managed competition procurement process for District 4, which includes all of Scarborough, while leaving garbage collection in District 3 to unionized city workers for now. The managed competition procurement process would allow both private companies and the city’s unionized workers to submit bids. … While staff are only recommending privatizing garbage collection in Scarborough right now, the report states that the results of the change will be used as a “guide for future service delivery recommendations” in District 3, which includes the downtown neighbourhoods east of Yonge Street. Officials with CUPE Local 416 have estimated that the privatization of garbage collection in District 4 could mean the loss of 200 to 250 unionized jobs. Those job losses would come after the elimination of 150 positions when garbage collection was first privatized in the west end in 2012.

The city is on track to contract out garbage collection east of Yonge St. Councillors on the public works committee voted 3-1 in favour of having city officials report early next year on a path to privatization. The committee made the move a day after Mayor John Tory told the Toronto Sun he will push to contract out garbage in the east end, arguing that it’ll save money. City council will have final say on the controversial issue at a later date. The mayor’s proposal was met with anger from the union that represents the city’s garbage collectors, insisting contracting out their work will not save taxpayers cash. Matt Figliano, of CUPE Local 416, said Tory doesn’t “have the facts.” He referred to a 2015 consultant’s report that said there was no cost savings to be had by contracting out. … The union accused Tory of attempting to fire 500 workers. If the city wants to find savings, it should eliminate managers, Figliano said. “For every four members that we have, we have one manager or supervisor that makes six figures. You’re attacking the hard-working men and women that make an average $50,000 a year. It’s a bloated bureaucracy, that’s what this is,” he said. Councillor Joe Mihevc said the city already has the right balance on trash collection that allows it to get the best cost, a mix of private and public collection. … Deputy Mayor Denzil Minnan-Wong said he doubts the Ernst and Young report is correct given past experience with contracting out garbage collection in the west end. That saves the city $11.7 million a year. …

Following the Ford administration’s privatization of residential garbage pick-up east of Yonge in 2011, the City of Toronto’s waste management has remained in a somewhat awkward state of semi-privatization. While residential trash west of Yonge is handled by private companies, the east end remains the purview of City service. However, with Mayor Tory now moving forward with a 2014 campaign pledge to outsource the City’s remaining garbage collection, the whole of Toronto could be moving towards private collection. But how does privatization work? And what are its impacts? In Toronto, the answers to these questions are at once relatively simple and profoundly complex. That’s because there are actually two types of privatization. While the City’s controversial outsourcing of pick-up and disposal follows a relatively straightforward process, a parallel form of privatized service follows different rules. … The privatization of service proposed by Mayor Tory follows a pair of earlier initiatives. A 1995 agreement saw pre-amalgamation Etobicoke privatize collection over two decades ago, while Rob Ford’s 2011 privatization of garbage service west of Yonge effectively bifurcated the city between public and private collection. In both instances—as in Tory’s current pitch—the outsourcing came about as a cost-saving measure. Following privatization, Etobicoke reported average annual savings of $1.8 million, while Ford’s initiative initially saw yearly costs reduced by $11.9 million. With support for Municipal service also hampered by two long and memorable garbage strikes in 2003 and 2009, the push for privatization was relatively well received in subsequent years. In particular, widespread displeasure with the 39-day garbage strike of 2009 eroded public backing for Toronto’s Civic Employees Union (CUPE). Nonetheless, some critics perceived privatized service as an inherent reduction in accountability in transparency, and as a symptom of unwillingness to adequately engage with the rights of unionized labour. …

Earlier today, City of Toronto staff released their report on the benefits and drawbacks of contracting out solid waste management east of Yonge Street. This report was further supported by an independent analysis from accounting firm Ernst and Young. … While we strongly believe that public services like solid waste collection are best delivered directly by municipalities, the mixed model currently in effect in Toronto is an effective one which makes sense for residents.

Mayor John Tory’s council allies are questioning the numbers used by city staff to recommend against contracting out garbage collection east of Yonge St. A report released Tuesday found it may actually cost more to privatize pickup in at least one east-end district despite what the city says was $11 million in annual savings from contracting out the same services in the west end. That creates a challenge for Tory, who during the mayoral election promised to privatize the remaining garbage pickup, citing cost savings — a long-held position by rivals Rob and Doug Ford. … taff tried to estimate what it might cost to contract out collection versus public service pickup over seven years, from 2017 to 2023. They compared the cost of contracted-out service in Etobicoke’s District 1 to in-house service in Scarborough’s District 4. They based the contract cost on the most recent garbage contract secured in 2014 for District 1. According to the city, those two suburban districts have comparable geography and building characteristics. Staff found the future cost reflected in present dollars of in-house service in District 4 — $96.8 million — is cheaper than assumed District 1 contracting-out costs at $116.8 million. …

The purpose of this report is to present the findings on the comparison of curbside collection districts in terms of costs, diversion rates, service levels and performance. It also provides an analysis of the financial and collection implications associated with the scenarios for contracting out collection services east of Yonge Street (Districts 3 and 4). A review of waste collection service delivery approaches in similar jurisdictions has also been undertaken. An independent financial analysis verification of the analysis was conducted by Ernst & Young LLP and is provided in Appendix C.